corporations (GOCCs) still owe the national government P24 billion from their P74 billion total earnings in 2008.
This was uncovered on Wednesday during a public hearing by the Senate Finance Committee that is looking into the alleged excessive and unwarranted salaries, allowances, bonuses, and other benefits of top officials of GOCCs and Government Financial Institutions (GFIs).
Senator Ralph G. Recto, chairman of the Senate government corporations and public enterprises committee, said these 143 GOCCs with an accumulated audited net income of P74 billion in 2008 should have remitted to the national government P37 billion but have only given P13 billion. This means these GOCCs still owe some P24 billion, Recto said.
PCSO losing P1 billion
At the same hearing, Recto expressed surprise why the state-owned sweepstakes which are deemed profitable. Jose Ferdinand Rojas II, PCSO general manager, testified that the PCSO has been “overspending during the past years and it has lots of payables.’’
After being appointed to the PCSO 31 days ago, Rojas said his office is at present undertaking cost-cutting procedures and attempting to increase revenues.
He also said the controversial STL (small time lottery) operation is being reviewed.
Of the GOCCs P74 billion audited net income, they should have given at least P37 billion to the national government but only remitted P13 billion. This means these GOCCs still owe some P23 billion, Recto said.
Sen. Franklin M. Drilon, finance committee chairman, expressed surprise over this development as his panel has started drafting a bill putting to a stop the granting by officials of GOCCs and GFIs to themselves of gargantuan and unconscionable bonuses and other benefits.
The Recto statement could not be expanded or clarified since the data was given by the Department of Finance (DoF) during a hearing at the House of Representatives last Tuesday.
As his committee is expected to wind up its probe next week, Drilon said he would ask DoF officials on Monday to explain why they earlier said that the GOCCs dividend was only P13 billion and “this obviously it is much more than that …. so we will look into this.’’
He said current laws dictate that GOOCs remit at least one half of its net earnings to the national government.
Mary Grace R. Chua, director of the Department of Budget and Management (DBM), testified that her department has no complete data on the GOOCs’ unremitted P14 billion earnings.
Last Monday, the Senate adopted a resolution authored by Drilon urging President Benigno S. Aquino III to immediately order the suspension of all apparently unwarranted salaries, allowances, benefits and other perks of officials and board members of GOCCs and GFIs.
The resolution noted that these GOOC and GFI officials gave themselves excessive, immoral, and abusive grant of salaries and bonuses which has caused irreparable damage to these corporations and institutions, and eroded government revenues.
In last Tuesday’s briefing for the Senate on the proposed 2011 P1.645 trillion national government by officials of the Development Board Coordinating Committee (DBCC), Drilon said reports from the Department of Finance indicated that in 2008, about P3.787 billion had not been remitted by the GOCCs from their income realized.
“In 2008, the estimated dividend due to the national government from all the GOCCs was P15 billion. The GOCCs only remitted as dividends P11,872,300,000 or an under-remittance of P3,787,000,000,’’ Drilon told Senate reporters last Tuesday.
Drilon also said that the Development Bank of the Philippines (DBP) has retained earnings of P18 billion “and certainly they do not need all of this P18 billion for capitalization and therefore a good portion of this P18 billion has to be remitted as dividends to the national government.’’
After the hearing, Drilon told Senate reporters that his committee would begin to draft a committee report and a proposed legislation that would rationalize the salary structures, bonuses and perks of GOCC officials and board members which at present are ‘’scandalous.’’
The Senate on Monday adopted a resolution authored by Drilon urging President Benigno S. Aquino III to immediately order the suspension of all apparently unwarranted salaries, allowances, benefits and other perks of officials and board members of GOCCs and GFIs.
The resolution noted that these GOCC and GFI officials gave themselves excessive, immoral and abusive grant of salaries and bonuses which has caused irreparable damage to these corporations and institutions, and eroded government revenues.
He said there are at present 25 GOCCs that are might not be covered by a proposed Malacañang executive order on the salary structures of GOCC officials and board members because they are exempt by the Salary Standardization law.
Drilon singled out the so-called abuses such as 25 months bonuses for Metropolitan Waterworks and Sewerage System (MWSS) and a P6 million benefits for board members of the Government Service Insurance System (GSIS) must stop.
MWSS urged to refund billions in water charges
In a related development, an administration lawmaker has asked the MWSS to cause the refund of billions of pesos in water charges collected by its two concessionaires to finance water and sewerage improvement projects that have yet to be implemented.
In a privilege speech late Tuesday, Bagong Henerasyon Partylist Rep. Bernadette Herrera-Dy said the Manila Water Company, Inc. and Maynilad Water Services, Inc. have also been collecting from Metro Manila consumers billions of pesos supposedly meant for earthquake contingencies.
Consumers already paying for unimplemented projects
Herrera-Dy said the insertion of additional charges in the water bills has been authorized by the MWSS under the rate rebasing scheme that allowed MWC and Maynilad to collect money from consumers for planned projects that would improve the water supply and sewerage system in the metropolis.
The neophyte solon said this has resulted in the imposition of exorbitant water service charges by the two concessionaires.
Records of the MWSS indicated that MWC has increased water rates from P4.02 cubic meters in 1997 to the present P30.34 per cubic meter for MWC customers.
Maynilad, on the other hand, hiked its charges from P7.21 per cubic meter in 1997 to P33.32 this Thursday.
Under the rate rebasing scheme, MWC and Maynilad are allowed to adjust charges to recover past expenditures and provide sufficient funding for their future projects.
Herrera-Dy drew a parallel between the escalating cost of water service and the huge allowances and other financial perks received by MWSS officials.
She said a congressional inquiry should be initiated in the Lower House to look into the transactions of MWSS officials who “may have committed malfeasance and misfeasance in the performance of their duties.”
She also demanded a “detailed accounting of all the capital expenditures” that have been front-loaded in the water bills under the rate rebasing scheme.
“It means that the concessionaries are allowed under this strategy to recover their expenditures, and such costs are directly passed on to the consumers, whether or not these projects are implemented,” said Herrera Dy.
According to Herrera-Dy, consumers are already being billed for the cost of projects that have yet to be implemented, including the following:
1. The P4.130-billion Earthquake Contingency project whose cost had been inputted in water bills collected since 2008.
2. The P732-million Wawa Dam project which remained pending since 2003 but is already included in the 2003 rate rebasing computation and also included in the charges imposed on users.
3. The 300 MLD (million liters daily) Treated Bulk Water Project in Laguna Lake costing P100 million that was included in the 2003 rate rebasing program
4. The Angat Water Reliability Project at P5.4 billion
5. P45.3 billion Laiban Dam that was included in the 2008 Rate Rebasing
A former Quezon City councilor, Herrera-Dy also decried the MWSS decision to allow the collection of 10 percent environmental fee for sewerage and sanitation service although only ten percent of Metro Manila is covered by the sewerage system.
"Front-ending is totally unacceptable.
Why are we being duped to pay for services that are not yet delivered or worse, not to be delivered at all?” said Herrera-Dy as she assailed as illegal the policy of MWSS that would compel consumers to make advance payments for business plans of the two concessionaires.
Arroyo gov’t gave P447 million aid to 13 foundations, NGOs
Meanwhile, the Commission on Audit (CoA) questioned Pampanga Rep. Gloria Macapagal-Arroyo for granting during her term as president some P447 million worth of financial assistance to 13 foundations and non-government despite their failure to present required documents, including Securities and Exchange Commission (SEC) registration.
CoA also clarified that the total unliquidated cash advances made by Malacañang in 2009 reached P594 million instead of P405 million as earlier reported by the former president’s detractors.
Arroyo distributed bulk of the P447 million in financial assistance to organizations of local government officials and charitable institutions in Pampanga, where she ran as congresswoman.
The 2009 annual audit report for the Office of the President also showed that the ICTSI Foundation, an institution chaired by billionaire Enrique Razon, and the Philippine Good Work Foundation, were given P100 million each “when no vouchers and supporting documents were submitted.”
Both foundations sought the help of Arroyo in funding various projects in Bicol and Pampanga.
CoA said the failure of former Malacañang officials to submit required documents violated national government audit rules and is against the objective of promoting “necessary transparency and accountability, including monitoring of the implementation of projects funded out of the funds granted.”
The former president also donated P7 million to the Pampanga Mayor’s League and P5 million for the Board Member League of Pampanga. The PML has no SEC registration while the BMLP lacked disbursement vouchers.
Also receiving huge financial assistance from the former president were the Federation of Fil-Chinese Chamber of Commerce and Industry, P70 million; ABS-CBN Foundation, P30 million; Philippine Bamboo Foundation, P25 million; Butil, P10 million; Unang Hakbang Foundation, P25 million; Gawin ang Tama Movement, P25 million; Resource Enhancement and Cooperation for Habitat, P10 million and Mateo Veinticinco Caritas Foundation, P10 million.
According to state auditors, the donations were given despite incomplete documentary requirements such as disbursement vouchers, SEC registration, and other supporting papers.
The audit report indicated that the “management” has committed to substantially comply by submitting the documentary requirements as sought by CoA.
In the same report, CoA asked the former president to officials to liquidate cash advances that have reached P594,040,619.70 as of December, 2009.
Before leaving Malacañang, the Arroyo administration claimed that it has reduced the amount of unliquidated cash advances to P266,188,319.93. (With a report from Ben R. Rosario)